Proposed settlement in a class action against Sirius XM Radio over customer data


April 9th, 2021

Loewenthal (the “Plaintiff”) vs Sirius XM Radio et al (the “Defendants”)
Ontario Superior Court of Justice (Court File No. CV-20- 00648610-00CP)

The APA received several inquiries about the settlement in this case, which sees the lion`s share going to attorney`s fees and nothing to Sirius XM subscribers. Here`s some information that provides a more complete picture than what`s in the notice from Sirius XM.

Backgrounder on the SiriusXM class action settlement

The concern was that Sirius XM was engaged in the collection, storage and use of customer data and Personal/Private Information without obtaining adequate consent as required under the Personal Information Protection and Electronic Documents Act (PIPEDA) and privacy law in Canada.

Class members were customers who purchased, leased, or repaired a new or used vehicle and were automatically enrolled in a free monthly trial for SiriusXM. The customer data is accessed or gathered by Sirius XM when the car leaves the lot. It can happen without their knowledge and/or without their informed consent, whether they want the trial or not. Sirius XM stated in its privacy policy that it may keep this data "indefinitely" and may share it with third parties. Sirius XM maintains that solicitations for subscriptions and renewals fall within the auto dealership and/or auto manufacturer agreement that Sirius XM negotiates with the automakers and requires franchised dealerships to follow.

After obtaining partial information from Sirius XM, the plaintiff`s lawyers were unable to determine if any privacy breaches had occurred based on the information they received. SiriusXM offered to settle the action and make a goodwill contribution toward the study of privacy issues related to auto sales. The alternative was to try to obtain certification of the action and litigate with the risk of a hefty cost award against the plaintiff if the action failed. In Ontario, the successful side in a class action can ask for a substantial cost award from the opposing party.

 



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The four law firms that planned to litigate the case in British Columbia and Ontario decided to drop it because they couldn`t prove a breach that would open the door to damages. In exchange, SiriusXM agreed to cover their fees and costs, and make a goodwill contribution to promote privacy issues relating to the sale of automobiles. (Often settlements like this also prompt defending companies to tighten up their internal processes, but that is outside the agreement.)

The judge assigned to the case must now decide whether to approve the settlement and fees request; a hearing is scheduled for June 2021. The plaintiff, Mr. Lowenthal, chose to settle the action as the information that Sirius XM provided in relation to his identity was mostly in the public domain, including his name, email address, and satellite radio ID and number. Sirius XM did not explain how they got his data and personal information, how it was used, nor with whom it was shared, if anyone.

If you have additional information that you believe points to an actionable privacy breach by Sirius XM, the APA needs to hear from you. Write to us at apatoronto@apa.ca. The APA believes that if sufficient new evidence comes to light, the better venue might be a complaint to one of the provincial privacy commissioners or the federal Privacy Commissioner. The APA is not aware of any data hacking in Canada or instance of Sirius XM selling subscriber information to third parties without the customer`s consent.

The award to APA

The APA was not a party to the lawsuit. As it was being settled, an attorney for the plaintiffs contacted us to see if the Association could prepare guidance on privacy issues in the retail sale of automobiles in exchange for a contribution of $50,000 from the award. The APA was told that NO return of money to subscribers was being considered because SiriusXM did not agree they had done anything wrong when offering vehicle owners access to their programming, and certainly not anything that would result in an award for damages. Awards of this nature are occasionally made to the APA to support our public interest work when compensating a group of members directly is too small or impractical. It`s called a cy pres distribution to benefit class members generally instead of a direct payment. It has never been controversial with class members before.

After the deal became public, the APA learned that class members included over two million current and former SiriusXM subscribers in Canada. That would have worked out to compensation under 25 cents per customer had the defendants agreed to distribute it that way.

APA has a contingent plan to work with a professor active in the field of automotive law to prepare guidance for an upper year college course. The award will depend on Justice Akbarali`s OK of the settlement in June; he could reduce it or direct some of it toward a different non-consumer cause.

Questions from consumers

Who is your lawyer?
APA has several lawyers, mostly working on class actions representing consumers in cases where the APA is a plaintiff. Lawyers are currently working on cases against Nissan (CVT transmissions), Kia (bad engines), Ultramar and Couche Tard (gasoline price fixing), and two Canadian banks for marking up lien registration fees. APA has two lawyers, on retainer, who are available to answer legal questions from members with auto problems. None of these lawyers had any involvement with the Sirius XM class action.

Do you currently have any contracts or receive remuneration from any Hotz, Hotz law firm member or Sirius XM?
No, apart from the amount pending in the settlement. Class members are right to have questions when a settlement is empty for them. From APA's understanding of it, the action was discontinued because the lawyers believed their case was too weak to get certified and that if they lost, the firms could be subject to a hefty six-figure cost award against them. If you have personal knowledge of a data breach involving Sirius XM, APA welcomes receiving the information.

What is your connection to the Hotz and Associates law firm?
APA has no formal connection with Hotz and Associates or any of the other law firms working on this case. The APA's Director George Iny had several phone calls with the senior partner of Hotz and Associates, Glyn Hotz, about the Sirius XM class action. The APA shared its information on how the satellite radio subscription works with the law firms working on the case. Providing guidance is a service the APA extends to consumers, lawyers, and regulators on an almost daily basis, often at no charge, sometimes for the cost of a membership in the Association. In this case the guidance was provided at no charge, on a pro bono basis.

What expertise do you have in online privacy breaches?
The APA is not an expert in online privacy. The APA is an expert on auto retailing. We shared our information about the contractual relationships between the automakers, their franchised dealers, Sirius XM, and the Data Management Systems dealers use.

What is the name of the person who was involved in securing $50,000 dollars of class-action settlement money from Sirius XM Canada through Lawyer Hotz?
Nobody at the APA. We learned from lawyer Glyn Hotz that he or one of the other lawyers negotiated a contribution from Sirius XM. After the firms realised that they did not have the necessary evidence to carry the case forward they asked for a contribution to provide guidance to consumers on privacy matters. APA was told there was zero chance of any payment going to customers as Sirius XM does not agree that it misused customer data, nor that there was any liability for a breach.

APA was happy to receive the award, which isn't all that exceptional. In large auto-related class actions, it is sometimes impractical to refund customers individually, and there are very few public interest groups in Canada working exclusively in the auto space. For a company with a big subscriber list like Sirius XM, $50,000 works out to a refund of 25 cents or less per former and current subscriber. For this settlement, the APA was told that even 25 cents per customer wasn't in the cards as Sirius XM denied it did anything wrong.
 

 



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